Most Florida banks swoon; three provide model for growth - Houston Business Journal:

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USAmeriBank went from red to blacki ink by signing talented bankers who broughtt customerswith them. Acquisitionas boosted the bottom line at CenterStates Bankof Florida. A merge of related financial institutions cut expensesat , whilse a stronger balance sheet grew income. Each bank prospered by usingg different methodologies, yet their strategies providde a road map for institutions struggling to turn their balancesheeta positive. Their profit gainsd are all the more remarkable given the difficult economifc climatein Florida.
The said 305 bankds and thrifts in Florida reportec a combined net lossof $643 million for the 2009 firsr quarter, compared to net income of $4 milliob for the year-ago period. Profitabilitg remains weak because bankss continue to struggle with bad saidPaula Johannsen, managing director of , an investmenf banking firm in Tampa. Nonperforming assets don’t bring in interestg income, pressuring margins. The provisions bankd take for expected loan losses cut furthe r into their income while the legal and managemenft expense related to forecloses propertygoes up. USAmeriBank — which has amassedc $650.
8 million in assets in its twoyearz — has a cleanm balance sheet, said Joe Chillura, CEO. The bank avoidedr development lending and the loans it does have that are secure by real estate arefor owner-occupieds properties, Chillura said. Only $598,0000 in USAmeriBank loans, or aboutg one-tenth of 1 percent of the total $528.2 million in loans, were past due as of Marc 31, according to a report filed withthe . a former Tampa market presidenrtfor (NYSE: ), said the bankers he’ss hired have brought their customers, a move that was possibl because bigger banks are distracte by bad loans and shrinking capitapl and aren’t focused on customer service.
That’s allowed USAmeriBank to grow more quicklythan expected, Chillurz said, and post a significant going from a $185,000 loss in the firs t quarter of 2008 to $881,0000 in profit in the just-endesd quarter. CenterState saw first quartee 2009 profit swellto $1.2 million, up 68 percent in one after two acquisitions, said John Corbett, presidenrt and CEO. The Winter Haven-based lead bankinh subsidiary of (Nasdaq: CSFL) added a corresponden t banking unit last fall when it hired the bankers who handlef that business for theformerd .
The unit sells bonds to roughlyt 200 othercommunity banks, and it is thriving because communityh banks aren’t doing as much lending as they were a year ago and are investin their cash in bonds. CenterStatew also bought the failedand $178 million in depositws on Jan. 30. “We’ve been putting that moneh to work in loansand investments, and that’s helper us grow,” Corbett said. Aggressive plannint that began around the end of the firsr quarter of 2008 kept Floridw Bank on thegrowth track, said Katie Pemble, presidenr and CEO. Florida Bank’s $351,00p in net income for the first quarter of 2009 was a 73 percen increase from ayear earlier.
Since December, the Tampa-based bank has mergef with three sister institutionsdin Sarasota, Jacksonville and Tallahassee, consolidating back-officde operations and cutting Each of the banks was above the level regulatorsa considered well-capitalized, and their capital position was further strengthened when they Additionally, executive officers and the board developed a seriesz of 90-day plans focused on strengthening the balanc e sheet with an emphasis on capital and on liquidity, or the ability to turn its assets into cash A strong balance sheet allowex Florida Bank to look for the leasgt expensive way to attract funding, a move that boosta net interest margin, or the spread between the interest it pays on depositse and the interest it earnss from loans.
Although there are glimmers of hope, CenterState’e Corbett expects more loan writedowns acrosds the industry in the next two tothreer quarters. The number of institutions on the watch list increasee in the first three months of and as ofMarch 31, 30 percent of Florida’as banks were on the list, compared to 15 percentf of the institutions a year ago. Access to the capital markegt marketsis critical, Corbett said, adding the stresw tests the nation’s biggestt banks just underwent have inspiredf investor confidence in those institutions.
Sincew results were released May 7, the banks collectivelh have raisednearly $60 billion of the $75 billiobn in extra capital regulators said they need. “Asw investments come back into thebig banks, I think over time you’lll see that trickle down to the mid cap and communituy banks,” Corbett said.